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Nobody said running a cloud startup was going to be easy. But surely, it was never supposed to be this hard.

Last year, former MySQL man Marten Mickos was named chief executive officier of Eucalyptus Systems, a new company busy building and supporting Amazon-compatible clouds behind the firewall. But just as he arrived, things seemed to slip away from the ideal.

Mickos was appointed CEO in March 2010. His remit was to transform Eucalyptus from an academic outfit that had built an open source cloud platform into a professional IT company with proper development processes and paying customers. The VCs that tapped Mickos included Benchmark Capital, where Mickos had served as an "entrepreneur in residence" after he left Sun Microsystems and MySQL.

Four months in, one big name Eucalyptus customer - NASA - dropped Eucalyptus and joined Rackspace in founding a rival elastic computing fabric and storage platform. This was OpenStack.

NASA has used Eucalyptus for Nebula, a geektastic compute cloud meant to chomp on more than 100TB worth of images from the WorldWide telescope, but it switched to project to new software that would be folded into OpenStack.

NASA's walk-out sparked a debate over whether Eucalyptus is genuinely open to outside participation even though it's available under not one but two open-source licenses: GPLv3 and BSD. Since the founding of OpenStack, more than 60 companies – including Microsoft, Dell, Cisco, and Canonical – have signed on as OpenStack partners, embracing the promise of a truly open-source cloud project.

Then, last week, Eucalyptus took a more personal hit. Members of Mark Shuttleworth's cuddly Ubuntu Linux distro project decided that future releases of Ubuntu Server, including the 11.10 release due in October, would support OpenStack and not Eucalyptus.

The sting was made all the sharper given the fact that Ubuntu was such an early backer of cloud computing, the first Linux to include Amazon Machine Images (AMIs). The personal part? Billionaire Shuttleworth had been a Eucalyptus investor. After the rise of Openstack, it was Shuttleworth who told the Ubuntu faithful it was make-up-your-mind time: Eucalyptus or OpenStack. "Tighten up and make some firm decisions about the platforms we can support for 12.04 LTS." And they made up their minds for OpenStack.

It's not the end of the affair. Eucalyptus will still be available for download with Ubuntu. But Canonical's engineers are now focused on making sure that Ubuntu servers are tuned to OpenStack. They won't spend their time on Eucalyptus.

Talking to The Reg at the Open Source Business Conference (OSBC) in San Francisco, California this week, Mickos disagreed when we suggested the pendulum is now swinging against Eucalyptus and its Amazon-compatible model.

Two years back, if somebody said the word "cloud", the first thing that likely jumped to your mind was Amazon. Say "cloud" today, and you could be talking OpenStack, Microsoft's Azure, or Google's App Engine. But Mickos believes that Eucalyptus and Amazon still hold an advantage.

"I think our founders were super brilliant in picking the Amazon API and back then, it was a guess - they made a bet," Mickos said "Today, Amazon has market share of 60 to 70 per cent. It is the de-facto API, and it reflects on the private cloud side. Even customers who come to us and say 'We will not use Amazon' want the same."

He concedes, however, that the job has become harder. "When I joined, it was a very small team very focused on technology. We had to bring in new people to start operating as a company. Then the market suddenly became immensely crowded - every month there is a new company," he said.